This is a cyclical stock, we have reached a trough in commodities so I think this will outperform in the next year or so. Given that all commodity stocks are recovering, MT, AA, X etc, I think this will catch up as well.

http://wiki.fool.com/The_Graham_Number Formula: Fair value=Sqrt(22.5*EPS*BV) I expanded it a little by also using EPS Normalized and Tangible BV My current Graham Number Valuation Range (GNVR) for MIL: $9.60 to $33.89

Michael Smith is my idol. Has anyone ever seen the guy ? If you have a picture please post it. Hah the guy is a ghost....with only a top end trail of steady profits and shareholder wealth creation to be found.

Terra Nova Royalty Corp (TTT) is an iron ore royalty company that derives its income through indirect ownership in the Wabash Mine in Labrador, Canada. As typical of a Michael Smith company, determining TTT’s value, and hence a fair market price, is an intriguing exercise. Management is currently in the process of transforming TTT into a viable investor and financier in iron ore projects. TTT is a large holder of shares in its former parent company, German-based cement manufacturing equipment specialists KHD Humboldt Wedag International (KHDHF), and is in the process of distributing the majority of its KHDHF holdings to shareholders,

TTT has completed two of three KHDHF stock dividend distributions, with the third due to be paid as of record date September 23, 2010, when approximately 28.8% of the total issued KHDHF Shares will be distributed to TTT's shareholders. The Distribution will be on the basis of one KHDHF Share for every four shares of TTT held at the Record Date (no fractions). With KHDHF trading at $7.57, the stock distribution should be worth about $1.90 as of September 16th.

A large percentage of Terra Nova Royalty Corp’s book value is in cash, with several parts and pieces in transition. For example, management plans on increasing the book value of the Wabash royalty contract from $27 million to $200 million by year-end to reflect a more realistic value. Taking a closer look at TTT’s book value with 38 million shares outstanding after the $50 million rights offering of August 6th, current buyers of TTT stock could reasonable expect to be buying $10.85 of value. Cash value, the royalty, and the 19% of KHDHF that is to be retained amounts to approximately $5.75 - $6.00. The royalty is to be stepped up by $3.20, and the value of the 3rd distribution of KHDHF is approximately $1.90 as of this morning.

Using a base of $13 million net royalty income on $25 million in royalty revenues from a contract soon-to-be valued at $200 million, it would be reasonable to project similar results when the $121 million in cash Michael Smith has been building as a war chest is deployed into new investments in the iron ore production/royalty sector. This added capital could produce an additional $0.20 a share in income. Future net income available for cash distributions should have a floor of around $0.55 to $0.60 a share.

As always, don't forget to do your own DD before making investment decisions.